How traders are hedging Fortinet
Fortinet is pulling back from all time highs, and traders are guarding their profits.
optionMONSTER's Depth Charge monitoring program detected the purchase of 4,700 May 36 puts, most of which fetched $2.30. There was no open interest previously at the strike, which indicates new money was put to work.
Puts fix a level where a stock can be sold, so they appreciate in value when shares decline. Investors can buy them after profiting from a rally, protecting their holdings from a drop without having to exit the position. That way they can stay long with limited risk. (See our Education section.)
FTNT fell 1.70 percent to $34.71 in late morning trading, and is up 51 percent in the last year. The provider of network-security products has benefited from growing demand as companies respond to increased cyber attacks. Earnings have mostly been strong as well.
Total option volume was 8 times greater than average in the session, according to Depth Charge. Puts outnumbered calls by a bearish 26-to-1 ratio.
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